Can someone please help me undrestand these two!!? I am so confused I am ready to pull my own hair out… Thanks
Don’t overthink it. It describes the collateral backing a CDO. Cash - Regular Bonds Synthetic - Are a bunch of CDS positions. Basically insurance premiums on bonds.
good explanation, pinkman!
Cash CDO - You use actual underlying assets. Synthetic CDO - You don’t necessarily buy the undelying asset but use reference for it.